Full Congressional Record Transcript of Sanders Filibuster

THE ECONOMY -- (Senate - December
10, 2010)

[ Mr. SANDERS ] Mr.
President, let me begin by thanking my friend from Virginia for doing what is
very important. I think the essence of what he is saying is that today there
are millions of Federal employees, people in the Armed Forces, who are doing
the very best they can. In many instances, they are doing a great job to
protect our country, to keep it safe. And very often, to be honest with you,
these folks get dumped on. So it is important that people such as Senator Warner come here and point out individuals who are doing a great job, people of whom
we are very proud. So I thank Senator Warner for that.

Mr. President, as
I think everyone knows, President Obama and the Republican leadership have
reached an agreement on a very significant tax bill. In my view, the agreement
they reached is a bad deal for the American people. I think we can do better.

I am here today to
take a strong stand against this bill, and I intend to tell my colleagues and
the Nation exactly why I am in opposition to this bill. You can call what I am
doing today whatever you want. You can call it a filibuster. You can call it a
very long speech. I am not here to set any great records or to make a
spectacle; I am simply here today to take as long as I can to explain to the
American people the fact that we have to do a lot better than this agreement
provides.

Let me enumerate
some of the reasons I am opposed to this agreement.

First, as
everybody knows, this Nation has a recordbreaking $13.8 trillion national debt
at the same time as the middle class is collapsing and poverty is increasing.
And I think it is important to say a word--because I am not necessarily sure a
lot of Americans know this--about how we got to where we are today in terms of
the national debt.

I know there are
some people who think this all began the day President Obama took office. Well,
that is not quite the case. When President Clinton left office, this country
was running, in fact, a very significant surplus, and the projections were that
we were going to continue to run a surplus. During the 8 years of President
Bush's administration, for a number of reasons--the primary reasons being the
war in Iraq, the war in Afghanistan, huge tax breaks for the wealthiest people
in this country, a Medicare Part D prescription drug program, the Wall Street
bailout, among other things, all of which were not paid for--we saw an almost
doubling of the national debt. Since President Obama has been in office, we have
passed a stimulus package which has also added to the deficit and national
debt.

But here we are
today with a $13.8 trillion national debt, a $1.4 trillion deficit, and almost
all Americans are in agreement that this is a very serious issue. So the first
point I would make is that it seems to me to be
unconscionable--unconscionable--for my conservative friends and for everybody
else in this country to be driving up this already too high national debt by
giving tax breaks to millionaires and billionaires who don't need it, and in a
number of cases they don't even want it.

Here is one of the
interesting ironies. There are lists of many very wealthy people who have come
forward and said: Sure, I want a tax break. Everybody wants a tax break. But
you know what, there are other priorities in this country, and I don't need it.
Two of the wealthiest people in the world--and these are billionaires--Bill
Gates of Microsoft and Warren Buffett of Berkshire, say: It is absurd. We don't
need a tax break.

All over the
country, you hear a lot of folks who have a lot of money saying: Don't drive up
the deficit and force our kids to pay higher taxes to pay off the national debt
in order to give tax breaks to the richest people in this country.

We have been told
not to worry too much because the extension of these tax breaks for the wealthy
will only last 2 years--not to worry. Maybe that is the case. But given the
political reality I have seen in Washington, my guess is that 2 years from now
these tax breaks for the wealthiest people in this country will be extended
again. What happens around here is that the argument will be made that if you
end these tax breaks you are raising taxes. That is what we are hearing right
now. I see no reason why, in the middle of a Presidential election, those
arguments will not be made again and I see no reason not to believe that those
tax breaks will be extended again.

(The ACTING
PRESIDENT pro tempore assumed the chair.)

Mr. SANDERS.
Clearly, we have a number of Republicans who want to make that extension
permanent. Whether it will ever be made permanent I don't know. But the point
is, when you hear folks say it is only a 2-year extension, I suggest you take
that with a grain of salt.

Let me say, if in
fact we do what the Republicans have wanted to do right now as we enter this
debate--they wanted a 10-year extension--that would add $700 billion to our
national debt. I have four kids and I have six grandchildren. None of them has
a whole lot of money. I think it is grossly unfair to ask my kids and
grandchildren and the children all over this country to be paying higher taxes
in order to provide tax breaks for billionaires because we have driven up the
national debt. That is plain wrong. I think the vast majority of the American
people, whether they are progressives like myself or whether they are
conservatives, perceive that concept of giving tax breaks to billionaires when
we have such a high national debt makes no sense at all.

Furthermore, it is
important to point out that extending income tax breaks to the top 2 percent is
not the only unfair tax proposal in this agreement. This agreement between the
President and the Republican leadership also calls for a continuation of the
Bush era 15-percent tax rate on capital gains and dividends, meaning that those
people who make their living off their investments will continue to pay a
substantially lower tax rate than firemen, teachers, nurses, carpenters, and
virtually all the other working people of this country. I do not think that is
fair. That is wrong. If this agreement were to be passed, we would be
continuing that unfair arrangement.

On top of all
that, this agreement includes a horrendous proposal regarding the estate tax.
That is a Teddy Roosevelt initiative. Teddy Roosevelt was talking about this in
the early years of the 20th century. It was enacted in 1916 and it was enacted
for a couple of reasons. Teddy Roosevelt and the people of that era thought it was
wrong that a handful of people could have a huge concentration of wealth and then give that wealth, transmit
that wealth to their children. He did not think that was right.

Furthermore, it
was a source, a progressive and fair source, of revenue. Under the agreement
struck between the Republican leadership and the President, the estate tax
rate, which was 55 percent under President Clinton--and let's all remember, we
had problems with the economy under President Clinton but very few will deny
that during those years we were creating a heck of a lot more jobs than we did
under President Bush. That is the fact--over 20 million jobs under President
Clinton. We lost 600,000 private sector jobs under President Bush. During the
Clinton era, the tax rate on the estate tax was 55 percent. What this
arrangement would do is lower that tax rate to 35 percent, with an exemption on
the first $5 million of an individual's estate and $10 million for couples.

Here is the
important point I think many people do not know. I have to confess my
Republican friends and their pollsters and their language people have done a
very good job. This is the so-called death tax. I think all over America people
say this is terrible. I have $50,000 in the bank and I want to leave that to my
kids and the Government is going to take 55 percent of that, 35 percent of
that. What an outrage.

Let us be very
clear: This tax applies only--only--to the top three-tenths of 1 percent of
American families; 99.7 percent of American families will not pay one nickel in
an estate tax. This is not a tax on the rich, this is a tax on the very, very,
very rich.

If my Republican
friends had been successful in doing what they want to do, which is eliminate
this estate tax completely, it would have cost our Treasury--raised the
national debt by $1 trillion over a 10-year period. Families such as the Walton
family, of Wal-Mart fame, would have received, just this one family, about a
$30 billion tax break.

I find it hard to
believe when we are talking about massive cuts in programs for working
families, when we have this huge national debt, that anybody would be agreeing
to lowering the estate tax rate to 35 percent. That is what this agreement does
and I think that is a very bad idea.

Once again, while
the agreement on the estate tax is for 2 years--once again, there is very
little doubt in my mind that the Republicans will continue to push for lower
and lower estate tax rates because that is what they want. I think Senator Kyl has been pretty clear about this. They want to permanently repeal that tax.
That is $1 trillion in tax breaks to the top three-tenths of 1 percent. I think
we are down a bad path there and that is another reason why this agreement does
not make a whole lot of sense.

Third--and this is
a very important point that I think has not yet gotten the attention it
deserves--this agreement contains a payroll tax holiday which would cut $120
billion from Social Security payroll taxes for workers. There are a lot of
folks out there who say: This is pretty good. I am a worker, my contribution
will go from 6.2 percent today down to 4.2 percent. I will have more money in
my paycheck. It is a good idea.

Let's take a deep
breath and let's think about it for a second and understand what this whole
thing is about. This payroll tax holiday concept, as I understand it,
originally started with conservative Republicans. I know the Vice President
recently made the point this was originally a Republican idea. Why did the
Republicans come up with this idea? These are exactly the same people who do
not believe in Social Security. These are the same people who either want to
make significant cuts in Social Security or else they want to privatize Social
Security entirely. Here is the point: They understand that if we divert funding
that is supposed to go into the Social Security trust fund, which is what this
payroll tax holiday does, this is money that goes into the Social Security
trust fund that is now being diverted, cut back, in order to provide financial
support for workers--but that is a lot of money not going into the trust fund.

What the President
and others are saying is not to worry because that money will be covered by the
general fund. That is a very bad and dangerous precedent. Up until now, what
Social Security has been about is 100 percent funding from payroll
contributions, not from the general tax base. Once again, this is a 1-year
program. The loss of revenue going into Social Security can be covered by the
general fund. But we have a $13 trillion national debt. How much longer will
the general fund put money into Social Security? Is it a good idea for the
general fund to be doing that?

I would argue this
is not a good idea. This is a very dangerous step forward for those of us who
believe in Social Security. But this is not just Bernie Sanders saying
this. One of the more effective and I think important senior groups in America
is called the National Committee to Preserve Social Security and Medicare. I
don't know exactly how many but they have many members all over this country. I
know they are active in the State of Vermont. I want to read to you from a
press release they sent out the other day. This is the headline on it, from the
National Committee to Preserve Social Security and Medicare: ``Cutting
Contributions to Social Security Signals the Beginning of the End. Payroll Tax
Holiday Is Anything But.''

This is what they
say. This comes from Barbara Kennelly. Barbara came from the House of
Representatives. I have known her for years. She is now the president and CEO
of the National Committee to Preserve Social Security and Medicare, one of the
strong senior groups in the country.

Even though Social
Security contributed nothing to the current economic crisis, it has been
bartered in a deal that provides deficit-busting tax cuts for the wealthy.
Diverting $120 billion in Social Security contributions for a so-called ``tax
holiday'' may sound like a good deal for workers now, but it's bad business for
the program that a majority of middle-class seniors will rely upon in the
future.

That is what the
National Committee to Preserve Social Security and Medicare says about that
agreement and I agree with them. For all of us who understand that Social
Security is life and death for tens of millions of Americans today and will be
vitally important for working people as they reach retirement age, it is
important that we understand that Social Security has done a great job. A few
minutes ago the Presiding Officer was on the floor talking about the strong
work that our Federal employees do, and he is absolutely right. Sometimes we
also take for granted that Social Security has been an enormous success. It has
done exactly what those people who created it have wanted it to do--nothing
more, nothing less. It has succeeded. It has taken millions of seniors out of
poverty and given them an element of security. It has also helped people with
disabilities maintain their dignity. Widows and orphans are also getting help.

For 75 years it
has worked well. It has a $2.6 trillion surplus today and it can pay out
benefits for the next 29 years. It is strong. We want to make it stronger. This
payroll tax holiday I am afraid is a step very much in the wrong direction and
that is one of the important reasons why this agreement between the President
and the Republicans should be defeated.

Included in the
agreement are a number of business tax cuts. I am not going to be here to say
that some of them may not work. Some of them may work. Some will work better
than others. There is a whole list of them. But this is what I will say.
Economists on both ends of the political spectrum believe that if we are
serious about addressing the horrendous economic crisis we are in now, 9.8
percent unemployment, there are far more effective ways of creating the jobs we
have to create than those tax proposals. With corporate America already sitting
on close to $2 trillion cash on hand, it is not that our friends in corporate
America don't have any money, we have to help them. They have $2 trillion cash
on hand. The problem is not in my view that corporate taxes are too high; it is
that the middle class simply doesn't have the money to purchase the goods and
products that make our economy go and create jobs.

I think if our
goal is to create the millions and millions of jobs we need, and if our goal is
to make our country stronger internationally in a very tough global economy, I
would much prefer, and I think most economists would agree with me that a
better way to do that, to create the millions of jobs we have to create, is to
invest heavily in our infrastructure.

The truth is--and
I don't think anyone disputes this, the infrastructure in the United States is
crumbling, and I will go into more detail about that later.

I have some very
good information on it. But you do not have to be a civil engineer to know
that. All you have to do is get in your car today and drive someplace in my
State and all over this country. What you are going to see are roads that are
in disrepair. You are going to see bridges that, in some cases, have actually
been shut down. You are going to see water systems--I remember I was in
Rutland, VT, the second or third largest city in the State of Vermont, and the
mayor showed me a piece of pipe, an old piece of pipe.

He said: You know,
the engineer who helped develop this water system and lay this pipe, after he
did this work for Rutland, he went off to fight in the war.

I knew there was a
catch line coming. I said: What war was it?

He said: It was
the Civil War.

So you are talking
about water pipe being in Rutland, VT--and this is true all over the United
States--laid in the Civil War. The result is, we lose an enormous amount of
clean water every day through leaks and water pipes bursting all over the
United States of America.

Well, we can put
people to work improving our water systems, our wastewater plants. It is a very
expensive proposition to develop a good wastewater plant. I was a mayor, you
were a Governor, Mr. President. It is an expensive proposition for roads,
bridges. Furthermore, I do not have to tell anybody here, our rail system,
which used to be the greatest rail system in the world, is now falling way
behind every other major country on Earth.

As a result of the
stimulus package, we did a whole lot of very good things in the State of
Vermont. One of the things we were able to do was use $50 million of Federal
funds and private money to make major repair on one of our important railways
in the State.

But we remain far
behind most other countries around the industrialized world. China is exploding
in terms of the number of high-speed rail lines they have. We have to do
better. Our airports need work. Our air controllers need to be updated in terms
of the technology they have and use to make our flights safe.

The point is, what
most economists would tell you is when you invest in infrastructure, you get a
bigger bang for the buck. You create more jobs for your investment than, in
most instances, giving a variety of tax breaks to the corporate world.

Second of all, and
not unimportantly, when you invest in infrastructure, you are improving the
future of this country. You are making us more productive. It is not just creating
jobs, it is creating jobs for very specific purposes, which makes our Nation
more productive and efficient.

Thirdly, let me
tell you something. As a former mayor, infrastructure does not get better if
you ignore it. You can turn your back, if you are a mayor or Governor, on the
roads and the highways because you do not have the money to fix them today, but
they are not going to get better next year. At some point, they are going to
have to be repaired and fixed. We may as well do that right now.

So I believe the
money, the very substantial sums of money in this agreement between the
President and the Republicans, which goes into tax breaks for corporate
America, could be effectively spent on infrastructure.

The fifth point I
want to make in opposition to this agreement and what we have heard from the
President and others is that this is a compromise. You cannot get everything
you want. Well, you cannot get everything you want around here is true, but one
of the examples of compromise is an extension of unemployment benefits for 13
months.

Well, let me be
very clear. In the midst of a serious and major recession, at a time when
millions of our fellow Americans are not only out of work through no fault of
their own, but they have been out of work for a very long time, it would be, in
my view, immoral and wrong to turn our backs on those workers. Their
unemployment benefits are going to be running out soon. It is absolutely
imperative that we extend those unemployment benefits for the 2 million workers
who would lose them.

But here is the
point I want to make. Some people say this is a compromise. Well, the
Republicans gave on unemployment; the President gave on extending tax breaks
for the rich, et cetera. But here is the point. I do not believe, honestly,
that the Republican support now for extending unemployment benefits constitutes
much of a compromise because the truth is, for the past 40 years, under both
Democratic and Republican administrations, under the leadership in the Senate and
the House of Democrats or Republicans, it has been bipartisan policy that
whenever the unemployment rate has been above 7.2 percent, unemployment
insurance has always been extended. So what we have had is longstanding,
bipartisan policy. That is what we have always done. That is what we should be
doing in the future. I do not regard Republicans now supporting what their
party has always supported, extending unemployment benefits when unemployment
becomes very high--I do not see that as a compromise. I see that as what has
been going on in this country and in the Senate for four decades.

I have talked
about the negative aspects of this proposal. But I am going to be the first to
admit that, of course, there are positive and good agreements in this. And what
are they? What are some of the positive aspects of this agreement? Let me just
tick them off.

No. 1, I believe
very strongly, and I know the President does, it is absolutely imperative that
we extend middle-class tax cuts for 98 percent of the American people. I do not
think there has been any debate about that.

When median family
income has gone down by over $2,000 during the Bush years, when millions of our
people today are working longer hours for low wages, when people cannot afford
to send their kids to college or to take care of childcare, I think it makes
absolute sense. I do not think anyone will argue it is absolutely imperative
that we extend middle-class tax cuts. That is what this provision does. That is
the right thing.

Furthermore, in
this agreement we have an extension of the earned-income tax credit for working
Americans, and the child and college tax credit are also in there. Every one of
these agreements is very important. These programs will keep millions of
Americans from slipping out of the middle class and into poverty. They will
allow millions of Americans to send their kids to college.

So I am not here
to say there is not anything of value in this agreement between the President
and the Republicans. There are, and we have to fight to make sure all of those
programs remain in the final package when it is passed--when the final package
is passed. But when we look at the overall agreement, we must put it in a
broader context; that is, what will the passage of this legislation mean for
the future of our country?

In that area, if
you look at it in that context, I think the evidence is pretty strong it is not
just a good agreement and not something that should be passed. The passage of
this agreement would mean we would continue the Bush policy of trickle-down
economics for at least 2 more years. That is not a good thing to do because, I
think, as most Americans know, that philosophy, that economic approach, simply
did not work. The evidence is quite overwhelming. I do not think there is much
debate, when median family income during Bush's 8 years goes down by $2,200,
when we end up losing over 600,000 private sector jobs, and all of the job
growth was in the Federal level, I do not see how anybody would want to
continue that philosophy. But that, in essence, is what will happen if this
agreement is passed.

Now, I want to
make another point about what happens if--if, and I will do my best to prevent
this from happening--but what would happen if this agreement would pass? Does
anybody seriously believe our Republican colleagues would then say: OK, well,
we have an extension of tax breaks for the very richest people. We have lowered
the tax rate on the estate tax. Those are good victories for millionaires and
billionaires. We are going to go home now. We are not going to continue the
fight.

I do not think so.
We are already hearing sounds about where our Republican friends want to go.
The President put together what I thought was a very poor deficit reduction
commission. I thought the folks on it were not reflective of the American
people. I thought there was very much a big business, corporate partiality
there.

The initiatives
that came out of that commission--which, fortunately, did not get the 14 votes
they needed--suggest to me that those of us who are concerned about protecting
the needs of the middle class and working families are going to have to push
back pretty hard for what is coming down the pike.

I think what we
will be seeing is--if this proposal negotiated between the President and the
Republicans is passed, what you will be seeing within a few months are folks
coming on the floor of the Senate, and this is what they will say: You know
what. The deficit is high. The national debt is too high. And, yes--oh, yes--we
drove the national debt up by giving tax breaks to millionaires. That is the
way it goes. But we are going to have to deal with our national debt.

The Republicans
will tell you: Oh, we have a great plan to deal with it. We are giving tax breaks
to millionaires. But now what we are going to have to do is start making deep
cuts in Social Security, and that deficit reduction commission started paving
the way for that, very substantial cuts in Social Security.

Maybe we will have
to raise the retirement age in Social Security to 69 or 70. Maybe we will have
to make cuts in Medicare. Maybe we will have to make cuts in Medicaid. I think
we are beginning to see, in the State of Arizona now, what goes on when you
make deep cuts in Medicaid.

In Arizona right
now there are people who are in line who need transplants, who will die if they
do not get transplants, as a result of legislation they passed there. They are
saying to people, young people: Sorry, we cannot afford to give you a transplant,
and you are going to have to die.

Well, is that what
we are looking forward to saying all over America? I certainly will do
everything I can to prevent that.

We are certainly
going to see a tax on environmental protection, on education. Some of us
believe if this country is going to prosper and succeed in the global economy,
we have to have the best educational system in the world from childcare through
college.

Right now, it is
extremely difficult for middle-class families to send their kids to college.
Does anyone have any doubt whatsoever that our Republican friends are not going
to come back here and say: Oh, we cannot afford to raise Pell Grants as we have
in recent years. We cannot afford to support working families who have their
kids in childcare. Cut. Cut. Cut.

That is insanity.
I am being honest about it. So I would suggest their argument is that we have a
high deficit and a high national debt; that if we pass this agreement and the
national debt goes higher, it only gives them more impetus to go forward to cut
programs that benefit working families and the middle class.

Let me also say
there is no doubt in my mind what many--not all but many--of my Republican
colleagues want to do; that is, they want to move this country back into the
1920s when essentially we had an economic and political system which was
controlled by big money interests; where working people and the middle class
had no programs to sustain them when things got bad, when they got old, and
when they got sick; when labor unions were very hard to come by because of antiworker
legislation. That is what they want. They do not believe in things like the
Environmental Protection Agency. They do not believe in things like Social
Security, Medicare, Medicaid, Federal aid to education. That is the fight we
will be waging.

I think to
surrender on this issue is to simply say we are going to be waging fight after
fight, starting within a couple of months.

President Obama
has said he fought as hard as he could against the Republican tax breaks for
the wealthy and for an extension in unemployment. Well, maybe. But the reality
is that fight cannot simply be waged inside the Beltway. Our job is to appeal
to the vast majority of the American people to stand up and to say: Wait a
minute. I do not want to see our national debt explode. I do not want to see my
kids and grandchildren paying higher taxes in order to give tax breaks to
millionaires and billionaires.

The vast majority
of the American people do not support that agreement in terms of giving tax
breaks to the very rich. Our job is to rally those people. I would like very
much to see the American people saying to our Republican colleagues and some
Democratic colleagues: Excuse me. Don't force my kids to have a lower standard
of living in order to give tax breaks to the richest people.

What the President
and all of us should be doing is going out and saying to those people: Call the
Members of the Senate, call the Members of the House and say: Excuse me. How
about representing the middle class and working families, for a change, rather
than the wealthiest people. That is what democracy is about.

This fight is not
going to be won inside the beltway in a Senate debate. It is going to be won
when the American people stand and say: Wait a second. We cannot continue to
give tax breaks to people who are doing phenomenally well right now. We cannot
give tax breaks to the rich when we already have the most unequal distribution
of income of any major country on Earth. The top 1 percent earns 23 percent of
all income in America, more than the bottom 50 percent. They don't need more
tax breaks to be paid for by our kids and grandchildren.

The vast majority
of people are behind us on this issue, but they have to make their voices heard
to their Senators, to their Congressmen. When they do, I believe we can come
forward with an agreement which protects the middle-class and working families
and is not a boondoggle for the wealthiest people.

It is important to
put the agreement the President struck with Republicans in a broader context.
We can't just look at the agreement unto itself. We have to look at it within
the context of what is going on in the country today, both economically and
politically. I think I speak for millions of Americans. There is a war going on
in this country. I am not referring to the war in Iraq or the war in
Afghanistan. I am talking about a war being waged by some of the wealthiest and
most powerful people against working families, against the disappearing and
shrinking middle class of our country. The billionaires of America are on the
warpath. They want more and more and more. That has everything to do with this
agreement reached between Republicans and the President.

In 2007, the top 1
percent of all income earners made 23.5 percent of all income. Let me repeat
that: The top 1 percent earned over 23 percent of all income; that is, more
than the bottom 50 percent. One percent here; fifty percent here. But for the
very wealthy, that is apparently not enough. The percentage of income going to
the top 1 percent nearly tripled since the 1970s. All over this country people
are angry, frustrated. It is true in Vermont. I am sure it is true in Virginia.
It is true all over America. But one of the reasons people are angry and
frustrated is they are working incredibly hard. In Vermont, I can tell my
colleagues, there are people who don't work one job, two jobs; there are people
working three jobs and four jobs, trying to cobble together an income in order
to support their families. I suspect that goes on all across the country. While
people are working harder and harder, in many cases their income is going down.
The fact is, 80 percent of all new income earned from 1980 to 2005 has gone to
the top 1 percent. Let me repeat that because that is an important fact. It
explains why the American people are feeling as angry as they are. They are
working hard, but they are not going anyplace. In some cases, in many cases,
their standard of living is actually going down. Eighty percent of all income
in recent years has gone to the top 1 percent. The richer people become much
richer, the middle class shrinks. Millions of Americans fall out of the middle
class and into poverty.

That is not
apparently enough for our friends at the top who have a religious ferocity in
terms of greed. They need more, more. It is similar to an addiction. Fifty
million is not enough. They need $100 million. One hundred million is not
enough; they need 1 billion. One billion is not enough. I am not quite sure how
much they need. When will it stop?

Today, in terms of
wealth as opposed to income, the top 1 percent now owns more wealth than the
bottom 90 percent. When we went to school, we used to read in the textbooks
about Latin America, and they used to refer to some of the countries there as
``banana republics,'' countries in which a handful of families controlled the
economic and political life of the nation. I don't wish to upset the American
people, but we are not all that far away from that reality today. The top 1
percent has seen a tripling of the percentage of income they earn. Since the
1970s, the top 1 percent owning 23 percent of all income, more than the bottom
50 percent. The top 1 percent now owns more wealth than the bottom 90 percent.
That is not the foundation of a democratic society. That is the foundation for
an oligarchic society. The rich get richer. The middle class shrinks. Poverty
increases. Apparently, God is not good enough yet for some of the richest
people.

I say ``some of
the richest'' because there are a lot of folks with a lot of money who do love
this country, they are not into greed, but there are some who are. More, more more,
that is what they need.

For example--this
galls me and galls many of the people in this country--the horrendous recession
we are in right now, where millions and millions of people have lost their
jobs, their savings, their homes, this recession was caused by the greed and
recklessness and illegal behavior on Wall Street. These guys, through their
greed, created the most severe economic recession since the Great Depression.
The American people bailed them out. Now, 2 years after the bailout, they are
giving themselves more compensation than they ever have. They are saying to the
American people: Sorry we caused this recession because of our greed. Sorry you
are unemployed. Sorry you lost your house. But that is not all that important.
What is important is that I, on Wall Street, continue to get millions of
dollars in compensation and in bonuses, that I have big parties. How can I get
by on one house? I need 5 houses, 10 houses. I need three jet planes to take me
all over the world. Sorry. We have the money. We have the power. We have the
lobbyists here on Wall Street. Tough luck. That is the world, get used to it.

The rich get
richer. The middle class shrinks. Not enough, not enough. The very rich seem to
want more and more and more, and they are prepared to dismantle the existing
political and social order in order to get it. So we have the economics and
distribution of income and wealth as one thing, but then we must discuss
politics.

What happened last
year, as I think most Americans know, is the Supreme Court made a very strange
decision. The Supreme Court decided that corporations are people and they have
the right of free speech and the right without disclosure--all of this is
through the Citizens United Supreme Court decision--to put as much money as they
want into campaigns all over the country. In this last campaign, that is what
we saw: Billionaires, in secret, pouring money into campaigns all over the
country. Does that sound like democracy to anybody in America; that we have a
handful of billionaires probably dividing up the country? I will put this
amount in Virginia, California, wherever.

That is what they
were able to do. The rich get richer, and they don't sit on this money. What
they then do is use it to elect people who support them and to unelect people
who oppose their agenda and they use their political power to get legislation
passed which makes the wealthy even wealthier.

One of the
manifestations of that is, in fact, the agreement reached between the President
and the Republican leadership. The wealthy contribute huge sums of money into
campaigns. The wealthy have all kinds of lobbyists around here through
corporate America. What they are going to get out of this agreement are huge
tax breaks that benefit themselves. That is not what we should be supporting.

We should
understand this agreement is just the beginning of an assault on legislation
and programs that have benefited the American people for 70 or 80 years. Mark
my words, there will be an intensive effort to privatize Social Security and
Medicare and Medicaid. Furthermore, it is part of the Republican agenda. They
want to expand--and it is not only Republicans here, some Democrats as
well--our disastrous trade policies so large companies can continue their
efforts to outsource American jobs to China and other low-wage countries. Any
objective analysis of our trade policies has shown it has been a grotesque
failure for ordinary Americans. It is hard to calculate exactly, but I think it
is fair to say we have lost millions of decent-paying jobs. During the Bush
years alone, some 48,000 factories shut down. We went from 19 million
manufacturing jobs to 12 million manufacturing jobs. Historically, in this
country, manufacturing jobs were the backbone of the working class. That is how
people made it into the middle class. That is how they had decent health care
benefits and pensions. Every day we are seeing those jobs disappear because
corporate America would prefer to do business in China or other low-wage
countries.

I returned from a
trip to Vietnam last year, a beautiful country. People there work for 25, 30
cents an hour. Sometimes when you go to a store, you may see a shirt made in
Bangladesh. That shirt, in all likelihood, is made by a young girl who came in
from the countryside to one of the factories there. The good news is that in
Bangladesh, the minimum wage was doubled. It went from 11 cents an hour to 23
cents an hour.

Are American
workers going to be able to compete against desperate people who make 23 cents
an hour?

So my view--and I
think it reflects the views of the American people--is that of course we want
to see the people of Bangladesh and the people of China do well. But they do
not have to do well at the expense of the American middle class. We do not have
to engage in a race to the bottom. Our goal is to bring them up, not us down.
But one of the results of our disastrous trade policies is that in many
instances wages in the United States have gone down.

I believe in the
coming months you are going to see an intensification of efforts to expand
unfettered free trade. I think that will be a continuation of a disastrous
policy for American workers.

Let me personalize
this a little bit. This gentleman, shown in this picture I have in the Chamber--I
have no personal animus toward him at all; I think I met him once in a large
room. His name is James Dimon. He is the CEO of JPMorgan Chase. Over the past 5
years, Mr. Dimon, who is the CEO of JPMorgan Chase, received $89 million in
total compensation--a bank that we now know received hundreds of billions in
low-interest loans and other financial assistance from the Federal Reserve and
the Treasury Department.

So Mr. Dimon
received $89 million in total compensation. His bank was bailed out big time by
the taxpayers. But under the legislation the President negotiated with the
Republicans, Mr. Dimon--I use him just as one example for thousands; nothing
personal to Mr. Dimon--will receive $1.1 million in tax breaks. So $1.1 million
in tax breaks for a major CEO on Wall Street, who over the last 5 years
received $89 million in total compensation.

Meanwhile--just to
contrast what is going on here--2 days ago, I brought before the Senate
legislation which would provide a $250 one-time check to over 50 million
seniors and disabled veterans, who for the last 2 years have not received a
COLA on their Social Security. Many of those seniors and disabled vets are
trying to get by on $14,000, $15,000, $18,000 a year. The total package for
that bill was approximately $14 billion that would go out to over 50 million
seniors and disabled vets. We won that vote on the floor of the Senate 53 to
45. But just because you get 53 votes in the Senate does not mean you win.
Because the Republicans filibustered, I needed 60 votes. I could not get 60
votes. I could not get one Republican vote to provide a $250 check to a
disabled veteran trying to get by on $15,000 or $16,000 a year.

But Mr. Dimon, who
made $89 million in the last 5 years, will get a $1 million tax deduction if
this agreement is passed. Now, that may make sense to some people. It does not
make a lot of sense to me.

Again, I have no
particular knowledge, animus--I do not know if I ever met John Mack in my life.
He is the CEO of Morgan Stanley. In 2006, he received a $40 million bonus,
which at the time was the largest bonus ever given to a Wall Street executive.

Two years after
receiving this bonus, Morgan Stanley received some $2 trillion in low-interest
loans and billions from the Treasury Department. Instead of losing his job,
under this agreement, Mr. Mack will be receiving an estimated $926,000 tax
break next year. Congratulations, Mr. Mack. You are doing fine. We could not
get $250 for a disabled vet.

Over the past 5
years, Ken Lewis, the former CEO of Bank of America, received over $165 million
in total compensation. In 2008, Bank of America received hundreds of billions
in taxpayer-backed loans from the Fed and a $45 billion bailout from the
Treasury Department.

What will Mr.
Lewis receive if the agreement negotiated between the President and the
Republicans goes forth? He will get a $713,000 tax cut.

And on and on it
goes. I did not mean to specifically pick on these guys. Some of the wealthiest
people in the country will be receiving a million-dollar-plus tax break. So we
as a nation have to decide whether that makes a lot of sense. I think it does
not.

Let me mention
that a couple weeks ago the Fed, the Federal Reserve, published on their Web
site some 21,000 transactions that took place during the Wall Street meltdown
period. That disclosure was made possible as part of a provision that I put
into the financial reform bill because I thought it was important the American
people, for the first time, lift the veil of secrecy at the Fed and get a sense
of the kind of money that was lent out by the Fed and who received that money.

What is very
interesting is that the American people and the media have focused on the $700
billion Wall Street bailout now known as TARP. I happen to have voted against
that agreement, but, in fairness, that agreement was pretty transparent. The
Treasury Department put up on their Web site all of those banks and financial
institutions that received the money. If you want to know where the money went,
it is right up there on the Treasury Department's Web site.

But at the same
time, a bigger transaction than TARP was taking place, which got relatively
little attention, and that was the role the Fed was playing in terms of the
Wall Street bailout.

While the TARP
issue was being debated during that period, Ben Bernanke, the Chairman of the
Federal Reserve, Tim Geithner, who was then the president of the New York Fed,
and a handful of other very powerful people were sitting behind closed doors
getting ready to lend out trillions--underline trillions--of taxpayer dollars
to large financial institutions and corporations, with no debate going on in
Congress, no debate whatsoever.

On March 3,
2009--and I am a member of the Senate Budget Committee--I asked the Fed
Chairman, Mr. Bernanke, to tell the American people the names of the financial
institutions that received this unprecedented backdoor bailout from the Fed,
how much they received, and the exact terms of this assistance. I will never
forget that. I asked Mr. Bernanke for that information. He said: Senator, no,
not going to give it to you, not going to make it public.

Well, on that day,
I introduced legislation to make that information public, working with a number
of Members of the House and the Senate. Some strange bedfellows--conservatives
and progressives--came together on this issue. We managed to get in the Wall
Street reform bill a disclosure provision, and on December 1--last week--that
information was made public. Let me talk a little bit about what was in that
information made public by the Fed.

After years of
stonewalling, the American people have learned the incredible, jaw-dropping
details of the Fed's multimillion-dollar bailout of Wall Street and corporate
America--not just Wall Street. It is one of the things we learned. As a result
of this disclosure, in my view--we are going to get into what was in what we
learned--Congress has to take a very extensive look at all aspects of how the
Federal Reserve functions and how we can make our financial institutions more
responsive to the needs of ordinary Americans and small businesses.

What have we
learned from the disclosure of December 1? This is based on an examination of
over 21,000 separate Federal Reserve transactions. More work, more research
needs to be done. But this is what we have learned so far.

As it turns out,
while small business owners in the State of Vermont and throughout this country
were being turned down for loans, not only did large financial
institutions--and I am talking about every major financial institution--receive
substantial help from the Fed, but also some of the largest corporations in
this country--not financial institutions--also received help in terms of very
low interest loans.

So you have every
major financial institution, you have some of our largest private corporations,
but here is something we also learned, and that is that this bailout impacted
not just American banks and corporations but also foreign banks and foreign
corporations as well, to the tune of many billions of dollars.

Then, on top of
that, a number of the wealthiest individuals in this country also received a
major bailout from the Fed. The ``emergency response,'' which is what the Fed
described their action as during the Wall Street collapse, appears to any
objective observer to have been the clearest case that I can imagine of socialism
for the very rich and rugged free market capitalism for everybody else.

In other words, if
you are a huge financial institution, whose recklessness and greed caused this
great recession, no problem. You are going to receive a substantial amount of
help from the taxpayers of this country. If you are a major American
corporation, such as General Electric or McDonald's or Caterpillar or
Harley-Davidson or Verizon, no problem. You are going to receive a major
handout from the U.S. Government.

But if you are a
small business in Vermont or California or Virginia, well, guess what, you are
on your own because right now we know one of the real impediments to the kind
of job creation we need in this country is that small businesses are not
getting the loans they need.

Furthermore, what
we now know is the extent of the bailout for the large financial corporations.
Goldman Sachs received nearly $600 billion. Morgan Stanley received nearly $2
trillion. Citigroup received $1.8 trillion. Bear Stearns received nearly $1
trillion. And Merrill Lynch received some $1.5 trillion in short-term loans
from the Fed.

But I think what
is most surprising for the American people is not just the bailout of Wall
Street and the financial institutions, and the bailout of large American
corporations such as General Electric, but I think the American people would
find it very strange that at a time when the American automobile sector was on
the verge of collapse--and goodness only knows how many thousands and thousands
of jobs we have lost in automobile manufacturing in this country--the Federal
Reserve was also bailing out Toyota and Mitsubishi, two Japanese carmakers, by
purchasing nearly $5 billion worth of their commercial paper from November 5,
2008, through January 30, 2009.

While virtually no
American-made cars or products of any kind are bought in Japan, I think the
American people would be shocked to learn that the Fed extended over $380
billion to the Central Bank of Japan to bail out banks in that country.

Furthermore, I
think the American people are interested to know that the Fed bailed out the
Korea Development Bank, the wholly owned, state-owned Bank of South Korea, by
purchasing over $2 billion of its commercial paper. The sole purpose of the
Korea Development Bank is to finance and manage major industrial projects to
enhance the national economy not of the United States of America but of South
Korea. I am not against South Korea. I wish the South Koreans all the luck in
the world. But it should not be the taxpayers of the United States lending
their banks' money to create jobs in South Korea. I would suggest maybe we want
to create jobs in the United States of America. At the same time, the Fed also
extended over $40 billion for the Central Bank of South Korea so that it had
enough money to bail out its own banks.

At a time when
small businesses in Vermont and all over this country cannot get the loans they
need to expand their businesses, I think the American people would find it
extremely--I don't know what the word is--maybe amusing that the Fed bailed out
the state-owned Bank of Bavaria--not Pennsylvania, not California, but
Bavaria--by purchasing over $2.2 billion of its commercial paper.

Furthermore, when
we cannot get support on the floor of this Senate to extend unemployment
benefits to millions of Americans who are on the verge of seeing them expire, I
think the American people would find it incomprehensible that the Fed chose to
bail out the Arab Banking Corporation based in Bahrain by providing them with
over $23 billion in loans with an interest rate as low as one-quarter of 1
percent. So small businessmen all over America: Maybe you have to run to
Bahrain and work with the Arab Banking Corporation there to get some pretty
good loans. But it would be nice if maybe the Fed would start to pay attention
to banks in this country.

Furthermore, the
Fed extended over $9.6 billion to the Central Bank of Mexico.

What is
interesting about all of this is that we had a very vigorous debate here in the
Senate and in the House over the $700 billion TARP program. Every person in
America could turn on C-SPAN and hear that debate. They could hear what
President Bush had to say, hear what then-Senator Obama and Senator McCain had to say. It was all pretty public. But what took place at the Fed, which, in
fact, amounted to a larger bailout, was done behind closed doors. Over $3
trillion was lent with zero transparency. In fact, as a result of this recent
disclosure--this is the first time we have gotten a glimpse of the magnitude
and the particulars, the specificities of where that money was lent, and I
think this is not a good thing for this country. Again, I voted against the
bailout of Wall Street, but the debate was open and public. People wrote to
their Senators and called their Senators. That is called democracy. After the
TARP bailout took place, all of the loans were put up on the Web site.
Transparency--the American people knew who got the money. But the actions of
the Fed were done behind closed doors, and, in my view--it is an issue we are
studying right now--I think there were significant conflicts of interest. I
think we had people sitting there at the New York Fed who were beneficiaries of
this bailout, and that is an issue we need to explore. I should tell my
colleagues that as part of the provision we got into the financial reform bill,
the GAO is, in fact, doing just that--investigating possible conflicts of
interest at the Fed with regard to this bailout.

I think the
question the American people are asking as they read about what the Fed did
during the financial crisis is whether the Fed has now become the central bank
of the world without any debate on the floor of the Senate or the Congress and
without the knowledge of the American people. I think that is wrong. So I hope,
out of this effort in bringing disclosure and transparency to the Fed, that one
of the things that will come will be more transparency at the Fed.

As I indicated a
moment ago, the Fed said this bailout was necessary in order to prevent the
world economy from going over a cliff. But 3 years after the start of the
recession, millions of Americans remain unemployed and have lost their homes,
their life savings, and their ability to send their kids to college. Meanwhile,
huge banks and large corporations have returned to making incredible profits
and paying their executives recordbreaking compensation packages, as if the
financial crisis they started never occurred.

What this recent
disclosure tells us, among many other things, is that despite this huge
taxpayer bailout, the Fed did not make the appropriate demands on these
financial institutions which would have been necessary to rebuild our economy
and protect the needs of ordinary Americans. In other words, what they simply
did was give out billions and billions of dollars which were used in the
self-interests of these financial institutions rather than saying: The American
people who are hurting are bailing you out, and now that they have bailed you
out, your responsibility is to do what you can to create jobs and to improve
the standard of living of the people, many of whose lives you have severely
impacted.

Let me give a few
examples of what could have been done and what should be done. At a time when
big banks have nearly $1 trillion in excess reserves parked at the Fed, the Fed
has not required these institutions to increase lending to small and
medium-sized businesses as a condition of the bailout. In other words, instead
of the Fed just giving money to these financial institutions, the Fed should
have said: We are giving you this money in order to get it into the economy.
Start providing affordable loans to small businesses.

At a time when
large corporations are more profitable than ever, the Fed did not demand that
corporations that received this backdoor bailout create jobs and expand the
economy once they returned to profitability. So what is going on in America?
Unemployment is officially at 9.8 percent and in a real sense probably at 15 or
16 percent, but Wall Street is now doing fine.

A few years ago,
Wall Street earned some 40 percent of all profits in America, and they are
doing great. But what the Fed should have done and should do now is to tell
Wall Street: You are part of the economy. You are not an isolated area just
living for yourselves. You have to be a part of the productive economy. You
have to lend money to small businesses to start creating jobs.

My office intends
to investigate whether these secret Fed loans, in some cases, turned out to be
direct corporate welfare to big banks that may have used those loans not to
reinvest in the economy but, rather, to lend back to the Federal Government at
a higher rate of interest by purchasing Treasury securities. Now, we don't know
that. Maybe that is true, maybe it is not true, but we will take a look at it.
In other words, did the Fed give one-half of 1 percent loans to a bank and that
bank then purchased a Treasury security at 2 or 3 percent? If so, you have a
2-percent profit margin, and that is nothing but corporate welfare. The goal of
the bailout was not to make Wall Street richer; the goal was to expand our
economy and put people to work.

Furthermore, we
know that as part of the TARP agreement, there was an effort to say to the
financial institutions: We are not bailing you out in order for you to get huge
compensation packages. We are not going to give you Federal money so you can
make all kinds of money. We put limitations on executive compensation.

Did the Fed play
the role of allowing some of the large financial institutions to pay back the
TARP money, use the Fed money, and then continue with their very high executive
compensation? We don't know, but it is worth investigating.

Furthermore--and
this is an issue I have worked on for a number of years. We know every major
religion on Earth--Christianity, Judaism, Islam, you name it--has always felt
that usury is immoral. What we mean by usury is that when someone doesn't have
a lot of money and you loan them money, you don't get blood out of a stone. You
can't ask for outrageously high interest rates when somebody is hurting. That
is immoral. Every major religion, all great philosophers have written about this.
Yet today we have millions of people in our country--and I hear from Vermonters
every week on this issue--who are paying 25 percent or 30 percent and in some
cases even higher interest rates on their credit cards--20 percent, 30 percent
interest rates. That is getting blood out of a stone. Yet many of the credit
card companies were bailed out by the taxpayers of this country. What the Fed
must do is say to those companies: Sorry, you can't continue to rip off the
American people and charge them 25 percent or 30 percent interest rates.

As it happens, the
four largest banks in this country, which are Bank of America, JPMorgan Chase,
Wells Fargo, and Citigroup, issue half of all mortgages in this country. Four
huge financial institutions issue half of all mortgages in this country. That
unto itself is a huge problem. They issue half of all mortgages, two-thirds of
all credit cards. That speaks to another issue about the need to start bringing
up these financial institutions. But when you have a handful of banks that
received huge bailouts from the Federal Government that are issuing two-thirds
of the credit cards in this country, it seems to me to be somewhat absurd that
the Fed did not say to them: Sorry, you can't charge people 25 or 30 percent
interest rates on your credit cards. The same principle applies to mortgages. I
don't have to tell anybody in this country that we have seen millions of folks
lose their homes through foreclosure, and once again we see that the four
largest banks in this country--Bank of America, JPMorgan Chase, Wells Fargo,
and Citigroup--issue half of all mortgages. Four banks issue two-thirds of the
credit cards and half of the mortgages. We bail these financial institutions
out. Don't they have some responsibility to the American people? How many more
Americans could have remained in their homes if the Fed had required those
bailed-out banks to reduce mortgage payments as a condition of receiving these
secret loans?

In terms of the
interest rates on credit cards, a lot of people don't know this, but right now
the banks are able to charge as much as they want to charge, but, in fact,
credit unions are not.

Right now, we are
looking at a situation where over one-quarter of all credit cardholders in this
country are now paying interest rates above 20 percent and in some cases as
high as 79 percent. In my view, when credit card companies charge over 20
percent interest, they are not engaged in the business of making credit
available to their customers; they are involved in extortion and
loan-sharking--nothing essentially different than gangsters who charge
outrageously high prices for their loans and who break kneecaps when their
victims can't afford to pay them. So that is where we are right now.